Monday, March 13, 2017

Creditors’ And Debtors’ Rights

Plaintiff moved for summary judgment, appointment of a referee to compute and a default judgment against non-appearing defendant. The original balloon note and mortgage was between Home Funds Direct and defendants, who allegedly defaulted by failing to make payments. US Bank Trust (USBT) moved for summary judgment, while defendants argued USBT did not have standing claiming MERS was never authorized by the original lender to assign the note and mortgage to USBT. They alleged the note was in the possession of a "custodian,"—Wells Fargo Bank, not USBT. The court found USBT failed to meet its burden of proving standing, finding it failed to prima facie establish it was in possession of the note as Wells Fargo continued to possess the original. Also, while USBT may establish standing by showing the note was assigned to them, it failed to succeed as there was no endorsement to MERS on the note giving it authority to assign. As there was no evidence indicating MERS had a right to assign the note, as MERS could not transfer what it did not hold, no factual details of a physical delivery were provided and USBT failed to establish it had physical possession at the time the action was commenced. USBT's motion was denied, and the case was dismissed.

The full text decision and summary can be found HERE